Anglo’s Grosvenor Coal Mine in Queensland, Australia was evacuated Saturday morning after a methane ignition caused a fire which engulfed the operation. Here, we take a look at possible effects on met coal markets...
1. Assuming you are an Australian resident with tax assessable income (in one financial year) of over $40k+ pa (including Capital Gains made of $10k+), how do you not pay CGT, & get a 100% refund of franking credits?
Is all your income from full-franked dividends?2. Very cashed-up YAL did not obtain BW & Daunia last October, from BMA
Yes, YAL is owned (& controlled) c.70% by the Chinese Communist Party. It has very little chance of obtaining Fed. govt. & FIRB approval of taking over Anglo's suite of 4 (or 5 with Grosvenor again opened) Qld. VERY profitable coal mines- clearly not in "Australia's national interests".
Also, China, in previous years, attempted to privatise YAL, which would have severely & financially disadvantaged the minority Australian shareholders. This created a huge backlash, which forced the CCP to desist..
Together with the totally unjustified & unofficial trade war instituted by the Chinese Communist Party against Australia in early 2020 (now mainly lifted), Australia & other pro-democratic countries are very distrustful of China's growing belligerence, due to the Chinese CP's:-
. increased threats to invade Taiwan; & flying over its airspace, sailing into its restricted sea zones
. building military bases on reefs it built up in the South China Sea/Eastern Sea- when it promised it would not
. taking full control of the South Chi/Eastern Sea, & its shipping lanes etc. This has included harassment (a potential damage) of RAAF aircraft in international waters there; & injuries to Australian naval divers
. sinking Vietnamese & Filipino fishing vessels, in both the latters' internationally recognised (including by the World Court arbitrations, & Rulings) exclusive maritime zones
. support for Russia, in its brutal invasion of Ukraine.
. not condemning North Korea (China's underling) for its recent decision to soon send "combat engineering troops" (supposedly behind the front line) to Ukraine; nor North Korea providing Russia already with c. 5million artillery shells ). Russia was running out of shells, as it currently fires, on average, c.20000 shells per day against Ukraine
North Korea Sent Russia Millions of Artillery Shells: South Korea | TIME
YAL has virtually zero chance of being allowed to buy Anglo's lucrative mines in the current "strained" political climate.
It is very disadvantageous to WHC that cashed-up YAL will be excluded. This will, eventually, bode well for a significant increase in WHC's SP (assuming WHC will bid for some).
3. coaltrader.com M.Warder 1.7.24 said
"6 days ago—... Grosvenor is permanently closed, then thebottom end of future price ranges will likely be elevated relative to recent levels. But given ...""Grosvenor Mine Fire Will Tighten Met Coal Markets
Grosvenor Mine Fire Will Tighten Met Coal Markets – The Coal Trade
(Behind paywall- can anyone open, & post here please?)
4. argus.media.com.au 4.7.24 said"These [Grosvenor] events are beyond our reasonable control and will partly or wholly prevent, hinder, or delay our ability to meet our delivery obligations of the product under the contract from the FOURTH calendar quarter of 2024," the company said in a letter to customers seen byArgus. The closure is expected to last for several months, depending on ongoing evaluations, according to Anglo American...
Supply concerns for the immediate term were alleviated when Anglo American informed several steel mills and trading firms on 3 July that itexpects to meet its contracted obligationsfor the third quarter...
Market participants agreed that a reduction in supply would likely be reflected in market prices in the longer run. "This will take 3.5mn t/yr of premium mid-volatile coal out of the market, a meaningful volume that will structurally TIGHTEN (all emphases, mine) the prime coal segment," an international supplier said. "The market feels like there's an overhang of prime coals especially from Canada recently, but we don't expect that to go on for too long. When that is used up, finding alternatives might be challenging ," he added".
Anglo declares FM after Grosvenor coking coal mine fire | Latest Market News (argusmedia.com)
